Gaymar Industries, Inc. v. Cincinnati Sub-Zero Products, Inc.


Docket No. 2014-1174

PROST, BRYSON, DYK

June 25, 2015

Brief Summary: DC denial of attorney’s fees under 35 USC § 285 reversed and remanded for reconsideration on the totality of the circumstances under Octane. The FC panel concluded that while CSZ’s statements “could be properly characterized as overstatements” and “sloppy argument, at worst”, the same were similarly not found not to amount to misrepresentation or litigation misconduct.

Summary:   Cincinnati Sub-Zero (CSZ) appealed DC denial of attorney’s fees under 35 USC § 285, finding the case not “exceptional” because Gaymar’s litigation position regarding its US 6,517,510 directed to a patient temperature control system (blanket that can conductively warm or cool the patient) was not objectively baseless and due to CSZ’s purported litigation misconduct.   After Gaymar sued for infringement, CSC filed an IPR, the DC stayed the litigation, and the PTO rejected all of the ‘510 claims. Gaymar filed a notice of appeal but ultimately filed an express abandonment of all claims, which were then cancelled by the PTO. CSZ then moved for attorney’s fees under § 285, alleging Gaymar’s litigation position was frivolous and it engaged in litigation misconduct, which was denied. CSZ moved for reconsideration following the SCOTUS Octane Fitness 2014 decision and the same decision was reached. The FC considered whether the correct legal standard was applied under § 285 de novo, the factual findings underlying the decision for clear error and the determination of whether the case is “exceptional” for an abuse of discretion (Monolithic Power, FC 2013; Highmark, SC 2014).   The panel concluded CSZ did not establish the DC erred deciding Gaymar’s claims were not objectively baseless (“fee awards are not to be used ‘as a penalty for failure to win a patent infringement suit’” (Octane)). It also explained that the DC “chose not to rest its decision on the reasonableness of Gaymar’s litigation position” (“the substantive strength of party’s litigating position” (Octane)), it instead relied on misconduct by CSZ (“a relevant factor under Octane’s totality of the circumstances inquiry”). And the FC found the DC “committed clear error here in finding misconduct by CSZ.” The DC had found misconduct in CSZ’s first statement that it needed to identify its own expert in 2008 but then in 2012 argued it had maintained an technical expert was not needed “from the outset”; the FC found this did not “amount to litigation misconduct”. The second point relied on by the DC was CSZ’s expert having “opine[d] on prior art from the perspective of one skill in the art, then later denying he did so” but the FC found the statements not to be inconsistent. Even though these and two other examples “could be properly characterized as overstatements” and “sloppy argument, at worst”, the same were similarly not found not to amount to misrepresentation or litigation misconduct. The decision was therefore reversed and remanded for reconsideration on the totality of the circumstances under Octane.

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